Elon Musk says Tesla's Shanghai factory is 'groundbreaking'

Tesla CEO Elon Musk and Shanghai's Mayor Ying Yong attend the Tesla Shanghai Gigafactory groundbreaking ceremony in Shanghai China

Image Elon Musk said the factory could be built in record time

"With the construction of the Shanghai factory, the faster the better [for Tesla]".

The plant in a Shanghai suburb is Musk's biggest overseas move yet and will eventually have an annual production capacity of 500,000 vehicles, Tesla says, dramatically increasing the California-based company's output. In this light, Tesla appears set to kick off 2019 on a strong note, starting the first week of the year with more than 14,000 Model 3 VIN registrations - over 9,000 of which are cars for the European market.

The first of the new electric models being developed by global automakers to hit the market, Nissan's Sylphy Zero Emission, began rolling off a production line in southern China in August. The company wants to take advantage of demand for electric vehicles in the world's biggest auto market.

The factory, Tesla's first in China, marks a major bet by the EV maker as it looks to bolster its presence in the world's biggest auto market where it faces rising competition from a swathe of domestic rivals, while its earnings have been hit by increased tariffs on USA imports.

Musk has also said the company needs the Chinese factory, outside Shanghai, to reduce tariffs that China imposed on imported cars in retaliation for President Trump's tariffs on Chinese steel.

CEO Elon Musk said Monday on Twitter that the company will start production in China of its Model 3 and a planned crossover by the end of the year.

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The push into China comes amid simmering trade tensions between Beijing and Washington. The factory, now just an expanse of muddy fields about two hours from Shanghai, will produce affordable versions of Tesla's Model 3 and Model Y for Greater China, he said during the visit, which took place on a cold, rainy day.

Other electric vehicle manufacturers in China include BYD Auto, BAIC Group, and government-owned Shanghai Automotive Industries Corp.

But the pace of growth is expected to slow along with China's economy.

Mr Musk, Tesla Motors' chief executive who resigned as its chairman in September, was at the 210-acre factory site yesterday and said that he wanted to build the plant, which could cost between $2 billion and $5 billion, "in record time".

China has raised import duties on US-made cars as part of the broader trade fight with the US.

Till now, foreign automakers in China were required to forge joint ventures with domestic firms for establishing manufacturing plants, which means sharing profits and technology with local partners.

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